For the six months ended 31 December, the company reported a 58 per cent increase in net profit after tax before amortisation and significant items – about $237 million when compared to the previous year’s corresponding period.
Sales revenue increased 40 per cent to $2.9 billion, reflecting Boral’s acquisition of US construction materials group Headwaters and solid revenue growth from Boral Australia.
{{quote-a:r-w:300-I:2-Q:"Our largest division, Boral Australia, delivered an exceptionally strong result; higher revenues and earnings were driven by increased spending on infrastructure."-WHO:Mike Kane, Boral CEO and managing director}}In all, earnings before tax, depreciation and amortisation (EBITDA) before significant items increased 50 per cent to $500 million.
Boral CEO and managing director Mike Kane said the results showed Boral’s “transformation strategy” was on track.
“Our largest division, Boral Australia, delivered an exceptionally strong result; higher revenues and earnings were driven by increased spending on infrastructure, in line with our expectations that a large proportion of our work would gradually shift from residential to infrastructure projects, primarily in the eastern states,” Kane said.
“The business is demonstrating a clear capability to efficiently deliver on more technical, innovative projects in a high demand environment.”
Regional outlook
Boral Australia delivered a 12 per cent lift in EBITDA to $294 million, thanks to growth in infrastructure and non-residential activity, a resilient housing market and very favourable weather across Australia, particularly on the east coast.
After enjoying EBITDA margins of 16.3 per cent and a 15.3 per cent EBIT return on funds employed, the Australian business is now expected to deliver high single digit EBITDA growth and low double digit EBIT growth, excluding property, in FY2018.
Boral Australia’s project work already includes 17 infrastructure projects (with estimated completion ranging from 2018 to 2020) in New South Wales, Queensland and Western Australia. It is tendering for up to 19 more projects on the east coast, including Victoria, and WA.
Boral Australia’s quarry earnings were reported as steady, with external revenue down three per cent. The reduction was attributed to supply interruptions in the Victorian metro region, and a shift to higher internal supply to meet growing demands in concrete (up 13 per cent) and asphalt (up 24 per cent).
Quarry volumes still increased two per cent, with strong demand in NSW, Queensland and South Australia. Aggregate volumes were up eight per cent, with strong growth in most regions.
Boral Australia also reinvested more than $111 million on its Deer Park (Vic), Orange Grove (WA) and Ormeau (Qld) sites, part of a $200 million capital program to modernise and secure future resource positions in Melbourne, Perth and Brisbane.
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